2004_1108_Packet - Laserfiche WebLink

Home

REQUEST FOR COUNCIL ACTION Date: 11/8/2004 Item No: 3.h Department ApprovaL• Manager Approved: Agenda Section: �� Consent Item Description: Eliminating the Internal Loan in the Parks & Recreation Fund Introduction As various times during the past few years, the Council was made aware that the City's Parks & Recreation Fund had incurred losses over a period of years, necessitating the use of an internal loan. The current deficit is $1.2 million, and resulted from accumulated operating deficits primarily related to the operation of the Oval. At the October 18, 2004 Council Study Session, the Council directed Staff to prepare a resolution that would forgive the internal loan made to the City's Parks & Recreation Fund. Background The internal loan was, and is, provided by the Park Infrastructure Maintenance Fund. This fund was created in 1998 for the purposes of providing an on-going funding source for park maintenance, whereby the Fund's annual interest earnings would be used to pay for a portion of the current year's maintenance efforts. However, beginning in 2001 these funds were tapped to cover the operating deficit(s) of the Oval. Forgiving the internal loan would render the practicality of having a separate Park Infrastructure Maintenance Fund debatable, as it would no longer have the ability to generate much interest earnings. The current fund balance in the Parks Infrastructure Maintenance Fund is approximately $300,000, which generates approximately $15,000 annually in interest earnings to support the City's park maintenance function. Had the $1.2 million accumulated deficit not occurred, the additional monies would have remained in the Parks Infrastructure Maintenance Fund and would have generated approximately $75,000 in annual interest earnings. Therefore, if the internal loan is cancelled, Staff also recommends that the City also eliminate the separately held Park Infrastructure Maintenance Fund, transferring all remaining monies to the Park Maintenance Fund. Attachments 1) Attachment A— Resolution forgiving the internal loan to the Parks & Recreation Fund, and to eliminate the Park Infrastructure Maintenance Fund, and transferring all remaining monies to the Park Maintenance Fund Council Action Requested Approve the attached resolution forgiving the internal loan to the Parks & Recreation Fund, and to eliminate the Parks Infrastructure Fund.